Companies can use projects as a powerful strategic tool to produce a competitive advantage and business value. Unlike the past, projects will become more and more important for driving a company’s strategy into new directions. Organizations should use project portfolio planning in order to plan their strategy.
Let’s see how to use PPM for different types of strategies.
Corporate Strategy
Companies have traditionally implemented their strategy by splitting general strategies into functional strategies or business unit strategies. Thanks to PPM it is possible to translate corporate strategy into a portfolio of projects. In fact, PPM allows executives to link a company’s strategy with the expected results.
When making decisions, organizations need to keep in mind their vision and mission. In fact, according to those factors companies plan their future by deciding which projects to start and with what priorities. In addition, to reach their goals companies periodically decide which projects to cancel or delay in order to free resources for projects with higher priority.
Business Strategy
Organizations can gain a competitive advantage over their competitors by using PPM practices. In fact, Project Portfolio Management can help companies to choose the right portfolio based on their business strategy.
PPM offers companies methods and tools for different objectives. For instance, thanks to PPM companies can compare costs through financial methods. They can analyse potential projects for differentiation. Furthermore, organizations could focus on a specific line of business by using tools for market analysis and then make operations more efficient by using resource distribution tools.
Functional Strategy
Project Portfolio Management supports companies to maximize their results. Here are the main objectives of PPM (Cooper):
- maximize value
- balance the portfolio
- align the projects strategically
- have the right number of projects
These objectives are really useful to take the functional strategy of how the stream of projects will go. In addition, it is also critical to consider which projects best fit with the rest of the portfolio by considering their interconnections.
Keep in mind
Project portfolio management (PPM) helps companies to achieve their objectives. Moreover, PPM supports companies to develop effective strategies by producing precious information.
